{"id":630781,"date":"2025-09-05T18:24:11","date_gmt":"2025-09-05T22:24:11","guid":{"rendered":"https:\/\/vtdigger.org\/?p=630781"},"modified":"2025-09-05T18:25:51","modified_gmt":"2025-09-05T22:25:51","slug":"state-health-care-regulator-attempts-to-rein-in-hospital-budgets-as-costs-balloon","status":"publish","type":"post","link":"https:\/\/vtdigger.org\/2025\/09\/05\/state-health-care-regulator-attempts-to-rein-in-hospital-budgets-as-costs-balloon\/","title":{"rendered":"State health care regulator attempts to rein in hospital budgets as costs balloon"},"content":{"rendered":"\n
\"\"
The University of Vermont Medical Center in Burlington on Monday, November 23, 2020. Photo by Glenn Russell\/VTDigger<\/figcaption><\/figure>\n\n\n\n

Vermont\u2019s independent health care regulator, the Green Mountain Care Board, is considering a set of recommendations that would place tighter guardrails on expenses run rampant across the University of Vermont Health Network. The board\u2019s staff presented the recommendations at its Wednesday meeting, a precursor to the board\u2019s annual hospital budget decisions due Sept. 15. <\/p>\n\n\n\n

New laws passed this legislative session bolstered the care board\u2019s ability to specifically tackle compensation for health care executives and the structure of network health operations<\/a>, like UVM Health Network. Gov. Phil Scott, who signed these laws, released a statement<\/a> Thursday commending the care board\u2019s efforts to lower the overall cost of health care in the state. <\/p>\n\n\n\n

\u201cIn recent years, GMCB regulatory review has identified concerns with University of Vermont Health Network operations, and lack of alignment between executive compensation and State healthcare goals,\u201d board chair Owen Foster told VTDigger in a statement following the hearing.  \u201cThis budget cycle GMCB\u2019s staff has accordingly conducted a deeper dive and analysis of these issues and yesterday made recommendations to the Board.\u201d <\/p>\n\n\n\n

Specifically, during its Wednesday presentation the care board staff illustrated<\/a> the extreme income disparities<\/a> between the UVM Medical Center and other hospitals owned by its parent company, the UVM Health Network. The network owns three hospitals in Vermont (UVM, Porter, and Central Vermont Medical Centers), three in New York, and a number of additional health care facilities in the region. <\/p>\n\n\n\n

UVMMC is the largest hospital in the network. Its budgeted revenue for 2026 is $2.4 billion, while Central Vermont’s is $318 million and Porter\u2019s $142 million. <\/p>\n\n\n\n

In 2020-24, losses across the UVM Network reached $12.8 million, according to the board staff\u2019s presentation. Still, the UVM Medical Center alone contributed more than $138 million in profit to the network during this period, the report also showed. Two of the three  New York hospitals in the network operated at a deficit. Of its proposed budgets for next fiscal year, UVMMC accounts for nearly 95% of the systemwide operating income. <\/p>\n\n\n\n

\u201cThe Health Network has made excess revenue margin here in Vermont, and the Health Network has needed to contribute those dollars to the New York Hospitals. Vermonters are paying for keeping those New York hospitals afloat,\u201d explained Mike Fisher, the state\u2019s health care advocate, in an interview with VTDigger after the budget hearing.<\/p>\n\n\n\n

Exactly what can the board do to curb that disparity? \u201cI\u2019m not exactly sure,\u201d Fisher said, but he was heartened to see the board make strides to pull hospital costs down, to be closer in line with what insurers will be able to pay them. <\/p>\n\n\n\n

To understand the hospital budgets, it\u2019s important to understand the insurance rate review. The two are deeply interconnected. In August, as part of this review process, the Green Mountain Care Board, approved moderate premium increases<\/a> for health insurers selling plans on the state\u2019s Affordable Care Act marketplace. These rates influence how much hospitals can bill insurers for their services. <\/p>\n\n\n\n

Insurance rate review and hospital budgets are two sides of one equation, Fisher explained. \u201cInsurance rate review is \u2018how much money do you have to spend?\u2019 Hospital budget [review] is analogous to \u2018Where are you going to spend those dollars?\u2019\u201d he said.<\/p>\n\n\n\n

\u201cIn years past those two sides of the equation haven’t added up. The board has allowed for more spending than it raised (through insurance payments),\u201d he added.<\/p>\n\n\n\n

For the coming fiscal year, the board recommended a commercial reimbursement rate reduction of 7.3% for UVMMC, as well as reductions to net patient revenue and expenses. It also recommended rate increases for Porter and Central Vermont Medical Centers of 2.9% (down, for both, from a proposed 3%) and budget reductions commensurate with reductions in net patient revenue.<\/p>\n\n\n\n

The staff recommendations came after Mike Smith, who leads an independent liaison team<\/a>,  delivered a scathing lette<\/a>r to the UVMHN Board, UVMMC Board and Green Mountain Care Board on Aug. 29, calling out the network\u2019s proposed budget narrative. He outlined that UVMNH\u2019s claims that it is working to improve affordability grossly conflict with the numbers on the page. While the network put forth lower rates, it outlined increases in use and type of services that more than offset that reduction.<\/p>\n\n\n\n

Because of this, commercial insurers will see a nearly $46 million increase in what they pay the UVMMC in 2026, Smith writes, despite the $76 million reduction in rates. <\/p>\n\n\n\n

Smith\u2019s letter also raised the concern that the care board outlined, stating that the medical center \u201cwas paying more than its fair share of network costs,\u201d especially by lending money to the network\u2019s New York hospitals. The network has made a net $68.9 million in loans to the New York hospitals between 2015 and 2013, Smith cites, adding that UVMMC and UVMHN invested an additional $20 million as part of an affiliation agreement, population health initiatives and capital investments. <\/p>\n\n\n\n

In response to the letter, UVM Health Network spokesperson Annie Mackin wrote that the \u201cUniversity of Vermont Health Network worked hard to submit budgets for FY \u201926 that complied with GMCB guidance, and which took into account the increasing need of our patients for health care services and the increased expenses involved in providing care. However, much work remains, and we and our partners will need to continue taking steps to improve affordability not just in this budget cycle, but in the months and years ahead. We look forward to further digging into the questions and ideas the liaison team have raised.\u201d<\/p>\n\n\n\n

Regarding the concerns about the cost burden of the network\u2019s New York hospitals, she said, \u201cOur health care partners in northern New York contribute real benefits to Vermonters \u2013 from the care they provide, to the positive economic impact when patients from Plattsburgh or Elizabethtown seek specialized treatment in Burlington,\u201d adding that the two New York hospitals in the red are \u201cmaking meaningful progress toward stability.\u201d<\/p>\n\n\n\n

The liaison\u2019s letter and the care board staff both also looked critically at executive compensation in the UVM network. For 14 executive positions at the network, they budgeted an average 9% increase \u2014 nearly a $50,000 average increase from fiscal year 2025 to 2026, care board staff outlined. The liaison\u2019s letter cited that rates of employee benefits have outpaced average cost growth in the past five years  across all three Vermont hospitals \u2014 nearly doubling at the medical center. In response, Mackin added that the health network compensates \u201call staff, regardless of their position, at market rates that help us recruit and retain the people we need to provide high quality care.\u201d<\/p>\n\n\n\n

Overall, expenses at the medical center have grown 9.8% annually between 2019 and 2024 \u2014 far outpacing the annual inflation rate for that same period.<\/p>\n\n\n\n

\u201cThe UVMHN must focus on affordability both in its words and in its budget submissions.<\/p>\n\n\n\n

Concrete steps must be taken to bring this budget and future ones in line with an agreed affordability metric that pertains to Vermont and Vermonters,\u201d Smith wrote in the letter.<\/p>\n\n\n\n

In the coming days the care board intends to deliberate and evaluate the proposed budgets and its staff recommendations, before beginning voting next week. The fiscal year for hospitals runs Oct. 1 through Sept. 30. The care board must establish a budget for each hospital by Sept. 15.<\/p>\n","protected":false},"excerpt":{"rendered":"

A slate of new laws are empowering the Green Mountain Care Board to tackle high executive compensation and health care costs ahead of its mid-September decision on hospital budgets. <\/p>\n","protected":false},"author":1831,"featured_media":525321,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"single-feature.php","format":"standard","meta":{"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","apple_news_api_created_at":"2025-09-05T22:24:15Z","apple_news_api_id":"6d1787bf-27fa-43ea-84fe-ec7149936201","apple_news_api_modified_at":"2025-09-05T22:25:55Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAAAA==","apple_news_api_share_url":"https:\/\/apple.news\/AbReHvyf6Q-qE_uxxSZNiAQ","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"everlit_article_id":"","everlit_hide_embed":false,"everlit_embed_size":"","everlit_generation_settings":[],"_everlit_article_id":"","_everlit_hide_embed":false,"_everlit_embed_size":"","_everlit_generation_settings":[],"_everlit_content_hash":"","_everlit_metadata_hash":"","_newspack_byline_active":false,"_newspack_byline":"","newspack_featured_image_position":"","newspack_post_subtitle":"A slate of new laws are empowering the Green Mountain Care Board to tackle high executive compensation and health care costs ahead of its mid-September decision on hospital budgets. ","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[162360],"tags":[4694,1361,4228],"newspack_spnsrs_tax":[],"govpack_profile_tax":[],"coauthors":[171839],"class_list":["post-630781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health","tag-green-mountain-care-board","tag-health-care-costs","tag-hospital-budgets","entry"],"apple_news_notices":[],"yoast_head":"\nState health care regulator attempts to rein in hospital budgets as costs balloon - VTDigger<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/vtdigger.org\/2025\/09\/05\/state-health-care-regulator-attempts-to-rein-in-hospital-budgets-as-costs-balloon\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State health care regulator attempts to rein in hospital budgets as costs balloon - 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